California health insurance commissioner to investigate Aetna’s medical claim review practices

CALIFORNIA HEALTH INSURANCE Commissioner Dave Jones has announced an investigation into Aetna’s medical claim review practices following a CNN report of a deposition by Dr. Jay Ken Iinuma, former medical director for Aetna for Southern California, in which Iinuma says he never reviewed medical records while deciding to approve or deny medical claims. / BLOOMBERG FILE PHOTO/MICHAEL NAGLE
CALIFORNIA HEALTH INSURANCE Commissioner Dave Jones has announced an investigation into Aetna’s medical claim review practices following a CNN report of a deposition by Dr. Jay Ken Iinuma, former medical director for Aetna for Southern California, in which Iinuma says he never reviewed medical records while deciding to approve or deny medical claims. / BLOOMBERG FILE PHOTO/MICHAEL NAGLE

WOONSOCKET – As CVS Health and Aetna continue planning for a proposed $69 billion merger, California Health Insurance Commissioner Dave Jones has announced an investigation into Aetna’s medical claim review practices.

Jones announced the investigation following a CNN report of a deposition by Dr. Jay Ken Iinuma, former medical director for Aetna for Southern California, in an Orange County Superior Court suit, Gillen Washington vs. Aetna Inc., in which the medical director says he never reviewed medical records while deciding to approve or deny medical claims.

In the suit, filed Sept. 25, 2015, Washington, a student at Northern Arizona University, claims Aetna’s refusal between September 2013 and the spring of 2015 to cover immunoglobulin infusion treatments to treat his rare immune disorder, common variable immunodeficiency disease, nearly killed him. Without the treatments, which are required every four weeks, Washington is highly prone to chronic respiratory, nose and eye infections.

During the deposition conducted by Washington’s attorney, Scott Glovsky, Iinuma said he relied on nurses to review medical records for him when deciding whether to approve medical claims at Aetna.

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“How would you decide on your own when to actually review the medical records on what the nurse at Aetna had prepared for you?” Glovsky asked during the deposition.

“What percentage?” asked Iinuma.

“I mean … did you ever look at medical records or basically whenever,” Glovsky began.

“No, I did not,” Iinuma said, interrupting him.

“OK. So, as part of your custom and practice in making decisions, you would rely only on what the nurse had prepared for you?” Glovsky asked.

“Correct,” Iinuma said.

“And was that throughout your – your years at Aetna?” Glovsky asked.

“My tenure, yes,” Iinuma replied.

“Was that how you were trained to do it when you joined – first joined Aetna?” Glovsky asked.

“To my recollection, yes,” Iiunma said.

The trial is set to begin in Orange County Superior Court on Wednesday.

In response to Jones’ announced investigation, Aetna released a statement saying its medical directors are trained to review medical information in their decisions, a process the company reviews yearly.

“Aetna medical directors review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process.

“While we can’t comment on the alleged actions of a former employee due to ongoing litigation, we want to be clear that our policies always have our members’ best interests in mind,” Aetna said.

CVS declined to comment on Jones’ investigation.

The market seemed slightly more positive on Aetna’s value at the close of the market Monday, ending with Aetna stock valued at $177.38 per share, or 99 cents per share higher than on Friday at $176.39, before word of the investigation broke. The merger now overvalues the stock, according to the market, at $27.18 per share higher than at the close of trading Monday.

With 326.8 million shares outstanding, the merger deal values Aetna at about $8.9 billion higher than the market. On Friday, the deal value for Aetna was $9 billion higher than the market.

Shareholders’ meetings for each company to vote on the proposed merger are scheduled for March 13 at 11 a.m. in New York City, at the offices of Shearman & Sterling LLP, 599 Lexington Ave., and at the offices of Davis Polk & Wardwell LLP, 450 Lexington Ave., respectively, for each to vote on the merger.

Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com